Govt urged not to change pricing mechanism

ISLAMABAD - Oil Marketing Companies (OMCs) has opposed the proposed complete deregulation of dealers and companies margin on the sale of petrol and asked petroleum ministry to maintain existing pricing mechanism to save consumer’s skin.Interestingly, brining stability in the prices of petroleum products (POL) was the part of a laid down policy of ruling Pakistan Muslim League (Nawaz). Even, when the PML-N was on opposition benches during outgoing PPP regime then it floated a proposal to bring stability in the oil prices like of neighbouring country (India). However, Ministry of Petroleum and Natural Resources is now making all out efforts to get the margin of oil marketing companies (OMCs) and petroleum dealers deregulated resultantly per liter price of petrol would be different on different filling stations even within a city of the country. Reliable sources aware of the development told The Nation that Oil Marketing Companies (OMCs) while opposing to end uniform petrol price mechanism and setting the price by dealers in the country has asked the government to maintain existing mechanism of determination of oil price. In this regard, chairman oil company’s advisory council Mark Suozzo called on minister for petroleum & natural resources Shahid Khaqqan Abbasi in the premises of petroleum ministry. During the meeting, OMCs has strongly opposed with petroleum ministry’s idea to end uniform petrol price mechanism and the proposal to authorise the dealers to set the price of petrol in the country. The OMCs were of the stand that petroleum dealers with this end to uniform petrol price mechanism would be free to collect the oil price at their sweet will. They also raised with the minister that petroleum dealers would be free to set the oil price at their own sweet will with complete deregulation of the margin and if dealers increase petrol price by Rs10/liter then who would control them, and who would stop them from fleecing the consumers because OMCs in case of new mechanism of petrol price would not able to stop the dealers in future from doing so. A senior official at petroleum ministry on the condition of anonymity earlier told this scribe that petroleum ministry in line with developed world was making all out efforts to get the margin of oil marketing companies (OMCs) and petroleum dealers deregulated over the sale of petrol. And, concerned authorities were drafting the summary after the instruction issued by top seated officials at the ministry. He also said that margin of OMCs and dealers would be deregulated after getting the approval of federal cabinet’s economic coordination committee (ECC). More, concerned OMCs and dealers would collect the margin over the sale of per liter of petrol on the basis of competition and their presence in the area according to proposed deregulation of margin of OMCs and petroleum dealers, he added.Interestingly, under the current mechanism, government in its bid to save the consumer’s skin from additional price has fixed the OMCs margin on petrol at Rs1.98/liter and the dealer’s margin at Rs2.37/liter.It is also worth mentioning here that OMCs and petroleum dealers earlier issued a strong worded warning letter to the petroleum ministry and asked it to fix the margin at Rs4/liter. The letter also said that if the government fails to increase the margin then OMCs and dealers would go on strike for unlimited period in protest.